Why Does My Company Need Cyber Liability Insurance?

Gadgets-In-Business-Vacation-Shopping-Banners-[Converted]Today’s businesses are more reliant than ever on technology.  Whether it’s an app, a device, or a piece of software, a business can save time and money.  However, this technology may expose them to multiple cyber risks that need to be addressed.  An unhappy ex-employee, a lost cell phone, an insecure password, an out-of-date computer system – these may all be a possible source of a data breach.

What is a data breach?
According to the Ponemon Institute, a breach is defined as an event in which an individual’s name and a medical record and/or a financial record or debit card is potentially put at risk—either in electronic or paper format.

Verizon found in their 2015 Data Breach Investigations report that about 50% of all security incidents are caused by people within your organization!  The other 50% are caused by hackers, viruses, malware, etc.  The people in your organization may not have caused the breach maliciously, but through human error or some other negligence.

Amazing Data Breach Facts

According to Ofcom’s “Adults’ Media Use and Attitudes Report 2013”, 55% of adults use the same password for everything.  Therefore, when one data breach occurs, about 55% of the passwords and information recovered can possibly lead to another breach, which can lead to another, etc. It’s easy to see how you can have a secure system, but if it’s not protected by secure employees, a data breach could easily occur.

login with email and password

The average cost per lost or stolen record in a data breach is $141 dollars according to the 2017 Ponemon Institute Data Breach study.

How many records is your company responsible for?  

When there is a breach in Pennsylvania, you are responsible for notifying each owner of those records that their data has been compromised.  Not only have you lost or diminished the trust of your clients, but you will spend a large amount of money informing them of this fact.

Because your clients can reasonably expect that you will protect their data, failing to do so can also result in federal and/or state fines.  Make sure that you are taking all reasonable steps to protect your data.

How can you protect your company from a data breach?

The first step that you can take is to purchase a cyber liability insurance policy. This allows you to transfer the risk to the insurance company and know that you are covered in the event of a data breach.  For the cost of a nice laptop (under $1500), you can purchase a standalone cyber liability policy.

This policy will help with a number of things when it comes to a data breach.  Most policies will cover the cost of notification, finding the breach source, fixing the source, restoring your clients’ trust, fines and more.  Before you purchase a policy, review the coverage available and ensure that you are fully covered.

The second step that you can take is to train your employees well and make sure that you have office procedures in place to ensure your security.

Leave a Reply

Your email address will not be published. Required fields are marked *